Understanding Payslips: What Should Be Included and Why? Seeking HR Insights

Hi All,

I would like to know what a payslip is and what it should contain. Why should a payslip contain certain items? Please forgive me, but in my opinion, things like Basic, HRA, etc., are essential. Please help me with the correct terminology.

Should a payslip include CTC or not? If yes, why? If no, why not?

I have a basic understanding of a payslip. Please correct me if I am mistaken.

- Basic
- HRA
- Others
- Conveyance
- Employer Contribution - Can it be included or not? If yes, why? If no, why not?

Gross

Deductions
- PT
- PF Employee
- Advance
- Loan

Net

Please, could you kindly assist me, dear HR professionals?

Thanks and have a great day! :)

Hi,

You should not show employer's contribution in gross here. A payslip is a legal document. The PF Act states that you shall not recover the employer's contribution from employees.

I am using your slip here:
Basic: 6000
HRA: 2000
Others: 5000
Conveyance: 2000
Employer Contribution: 720
__________________
Gross: 15720
__________________

Deductions:
PT: 200
PF Employee: 720
Advance: 2000
Loan: 2000
____________________
Net: 10800
_____________________

The net amount is Rs 10800. How much will you pay him? Rs 10800 or Rs 10080? Now, you may ask where this 10080 is coming from. You need to deposit the employer's contribution to PF, right?

By showing this in gross, you would need to collect this amount from him, which would be illegal to deduct again. Am I clear?

Siva

Dear Mr. Siva,

Thank you for your valuable answer. Very helpful. I should not mention the employer's PF contribution in gross pay, right? Suppose one of the employees' pay is Rs. 20,000. Below is the salary breakdown for the same:

Earnings:
Basic = 60% * 20,000 = 12,000
HRA = 40% * 12,000 = 4,800
Traveling allowance = 800
Medical allowance = 767
Employer contribution for PF = 13.61% * 12,000 = 1,633
Total gross pay = 20,000

Deductions:
PT = 200
Employee deduction for PF = 12% * 12,000 = 1,440
Net salary = 16,727

Now, based on the above calculation, should I show gross pay as 18,367 on the salary slip? Please help me.

Regards,